Frequently Asked Questions TOC

TOC is mainly known in operations (especially in supply chain and production), is there still an industrial future for our Western European countries?

This suggests that our 'captains of industry' would be better retrained as undertakers. This is certainly a bridge too far. The fact is, however, that the industrial boom is definitely over and everyone knows that workers in low-wage countries are a lot cheaper. But a lot of miscalculations have happened in many delocalisation projects. Starting with a gross underestimation of the logistics costs and the necessary organisation. There are also companies that have lost market share because all flexibility has disappeared.

Is price not a competitive weapon?

Yes, but experience with analyses of market constraints has shown that this is very seldom the case because we have long since moved away from cheap mass goods to specialities and niches.

Aren't our supply chains becoming too complex?

Indeed, the structure of some supply chains is more like a spider's web than a chain. However, the TOC control system can be applied to even very complex supply chains because it focuses on the critical points. This makes it possible to drastically reduce the number of focus points without lapsing into the wrong simplifications.

Can we not get rid of all this complexity and go back to simpler products?

We are talking about small series, piecework, niches and other specialities and a great deal of flexibility. Also products that have to be produced because of transport or close to the consumer. It is therefore best to prepare efficiently to serve that part of the market well, which is the best guarantee of building up a competitive edge that the low-wage countries will not quickly overtake.

Why not?

The low-wage countries work with organisations similar to ours from the beginning of the last century. It all works out well if you buy a few containers right away and order 6 months in advance. There are exceptions, but we need to build on the lead we already have (of necessity). Because of the complexity it is becoming increasingly difficult to find people with the right profile to drive something like this. Isn't this our weak link? That depends on the angle with which you want to tackle the problem. An organisational expert would suggest organising more coordination meetings between the various responsibilities. Will this help? Yes to a certain extent. However, these additional meetings also require more time and energy.

Is this situation not the result of a lack of discipline? Surely you cannot just short-circuit the hierarchy?

The big words have fallen: hierarchy and discipline. That solution is not necessarily wrong, but wrong when the interests of one's own department take precedence. By definition, a supply chain runs right through the hierarchy and sometimes creates conflicts that need to be resolved sensibly. It is better if global priorities are managed in such a way that these conflicts no longer occur. The nice thing is that such a solution is independent of the type of organisation.

Do we then have to redraw the organisation and grant all the authorisations to the supply chain manager?

Not necessary. The core problem is not the organisation, but the availability of the right and up-to-date information in the right form for all those involved.

Surely we are going to drown in masses of data that each interprets in their own way in order to prove themselves right?

No, nothing may be promised to the customer that has not been checked for availability in stock, components and/or capacity. We use 'due date quotation' for this purpose. The feedback to the customer is immediate and from that moment on is a firm commitment that we can keep because the planning is robust. The execution runs according to TOC buffer management, a proven technique that installs a pure 'pull-flow' and synchronises all activities involved.

Should we not rather apply the lean techniques to obtain a pull-flow?

Lean techniques are not applicable everywhere and almost always require a change in the layout on the work floor as well as sufficient uniformity in the flow and availability of all necessary components. This is very often a stumbling block in lean implementations.
With TOC control we achieve the same effect: shorter lead times and flexibility without changing a single nut on the shop floor. The availability of the components is also controlled using the same mechanisms. (So also the production of common components in-house or with subcontractors and the synchronisation of purchases.)

Isn't that what the ERP system does?

To our knowledge, no ERP system has yet fully integrated DBR and SDBR and TOC-supply chain synchronisation. Not even the APS solutions. See more about this here:

Goldratt FAQ

Is C&DS the solution then?

Not for all organisations, but you wouldn't even look at:

Goldratt C&DS

So is it enough to install software?

No, software is one of the necessary conditions, but this is not enough. Transfer of specific Know-How and Expertise are just as necessary because it concerns concepts and techniques that have to be adapted to the company. Copy-Paste solutions do not work because TOC takes into account the organisation's own 'constraint', which is different in every organisation. This also guarantees that you stay one step ahead of your competitors, especially if they try to copy just a few aspects without the necessary thorough approach.